WASHINGTON (Reuters) - The U.S. derivatives regulator warned on that uncertainty over Britain’s exit from the European Union is having a “substantial” impact on some U.S. entities and markets.

The Commodity Futures Trading Commission said the ongoing uncertainty about a Brexit outcome could create instability in the global derivatives market. In a statement, CFTC Chairman Christopher Giancarlo urged the EU and Britain to settle terms “in a manner that provides sufficient legal and regulatory certainty” to markets.

Britain has agreed on a deal to leave the EU, but political analysts say there is a strong chance it could be rejected by the British Parliament when put to a vote next week. Concerns that Britain will leave the EU in March 2019 without a deal have already hammered the pound and could cause dislocation in global markets, regulators and business leaders have warned.

Last week, the U.S. Federal Reserve said that a no-deal Brexit posed near-term risk to the U.S. financial system by disrupting cross-border financial services arrangements and potentially undermining confidence in the euro zone’s fiscal and financial prospects.

Brexit worries are adding to already jittery global markets that have been roiled by fears over a breakdown in U.S.-China trade relations and weak oil prices, with the U.S. Dow Jones stocks benchmark tumbling 2.7 percent on Thursday.

The CFTC is the primary regulator of the U.S. derivatives market, which is the world’s largest and is deeply interconnected with markets in Europe, Asia and other regions. The regulator is worried that changes to the terms of cross border EU-UK derivatives rules resulting from Britain leaving the EU could have ripple effects in the global market, since UK clearing houses also operate in the United States and Asia.

In particular, the EU has said it will still allow EU trades to be pushed through UK clearing houses after Brexit, even if Britain is not able to reach a final deal that would establish cross-border financial rules. But on Thursday, Giancarlo said the EU needed to provide greater clarity on the details of that arrangement, including which products would be included and how long the arrangement would last.

“This additional clarity and certainty are necessary to limit substantial operational and market risks that will result from the sudden transfer of potentially trillions of euros in swap exposures in the remaining weeks before a possible no-deal Brexit,” he added.